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It increases opportunities and allows you to feel confident that you are moving in the right direction. Our clients will attest, we are always available and never more than a telephone call or an e-mail away from a quick response to a troubling question. If the frequently asked questions below don’t answer your inquiry, contact us at 954.659.2220.

Useful Links and Resources

We have compiled the following list of popular and important resources available on the web.

Frequently Asked Questions

Q: What is a title search?

A: A title search is a thorough review or examination of the public records that pertain to real

property ownership and the rights/limitations of its use. The search period begins with the

current owner(s) and extends back in time for a period of 60 years (commonly referred to as

the “chain of title”). All documents affecting the subject property are reviewed for accuracy,

completeness and proper execution. Similarly, all owners of record during the search period are

indexed to determine their ownership interests, marital status and legal and mental capacity to

enter into a contract to sell/buy real property. All conveyances must have been properly

conducted and approved by the appropriate governmental departments.

Q: What issues can a title search reveal?

A: A title search can show any number of title defects, liens, and other encumbrances and

restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against

buyers/sellers and any restrictions or conditions limiting the use of the land.

Q: Are there any issues a title search may not reveal?

A: Yes. There are some “hidden hazards” that even the most diligent title search may not

reveal. For instance, a previous owner could have incorrectly stated his marital status resulting

in a possible claim by his legal spouse. Other hidden hazards include fraud, forgery, defective

deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in

the City/County land records. These defects can arise after you’ve purchased your home and

can jeopardize your right to ownership in part or full.

Q: What is Title Insurance?

A: The purchase of a home is probably the single largest investment you’ll make in your

lifetime. It is only prudent that you want to safeguard your rights and investment. Title

insurance assures that your rights and interests to the property are as expected, that the

transfer of ownership is smoothly completed and that you receive protection from future

claims against the property. It is the most effective, most accepted and least expensive way to

protect your ownership rights.

Q: What are Endorsements to Title Insurance?

A: Title Insurance has exceptions and exclusions. Title Endorsements close the gap. Title

Insurance policy does not cover covenants and restrictions violations, mineral issues,

easements, abusive association, challenges against condominium declarations, and the list goes

on…. For a nominal cost, Title Endorsements absorb all of those expenses.

Q: How much does Title Insurance cost?

A: Title Insurance fees are regulated by the State of Florida. The base rate is $5.75 per thousand

up to $100,000, and $5.00 per thousand thereafter up to $1 million. Discounts are available for

some transactions.

Q: Why do I need title insurance?

A: When you buy a home–or any property for that matter–you expect to enjoy certain benefits

from ownership…to be able to occupy and use the property as you wish, to be free from debts

or obligations not created or agreed to by you, and to be able to freely sell or pledge your

property as security for a loan. Title insurance is designed to cover these rights. Without an

owner’s title insurance policy, you may not be fully protected against errors in the public

records, hidden defects not disclosed by the public records, or mistakes made during the

examination of the title of your new property. As a result, you may be held fully accountable for

any liens, judgments or claims brought against your new property. However, your owner’s title

policy insures that if such an occasion arises, you will be defended, free of charge against all

covered claims and paid up to the amount of the policy to settle valid claims.

Q: What protection does title insurance provide?

A: A title insurance policy insures against any losses suffered due to this sort of legal action, up

to the face amount of the policy, and pays any and all legal costs incurred defending your rights

against the claim. Depending on the size and extent of the claim, this can add up to thousands

of dollars you would otherwise have to cover on your own.

Q: What sort of claims does a title insurance policy cover against?

A: Title insurance covers any undiscovered claims that may threaten your ownership of real

estate. If such an undiscovered claim did arise, it would be resolved or you will be reimbursed

just as your title policy states.

Most common hidden risks or undiscovered claims covered include but are not limited to:

False impersonation of the true owner of the property, Forged deed, releases or wills and

instruments executed under invalid or expired power of attorney, Undisclosed or missing heirs,

mistakes in recording legal documents, misinterpretations of wills and deeds by persons of

unsound mind, Deeds by minors, Deeds by persons supposedly single, but in fact married,


Liens for unpaid estate, inheritance, income or gift taxes, e3tc.

Q: What’s at stake if I opt against a policy?

A: In the most extreme case, a successful claim against your title could result in the loss of your

property, without any monetary compensation to you. In other words, you could wind up

having to continue paying your mortgage, even though the property is no longer yours.

Q: My lender had me buy title insurance for them when I took out my mortgage. Does their policy cover me too?

A:No. The policy your lender had you buy is known as a lender’s policy. It protects the lender’s

investment, not yours. You will need to purchase what is known as an owner’s policy to cover

yourself. The cost of the policy depends on the value of your home but should be minimal. Also,

unlike homeowner’s insurance, title insurance is a one-time purchase. A single premium covers

you and your heirs for as long as you own the property.

Q: What are the most common ways to take title and which one is right for me?

A: Tenants in Common, Joint Tenants with full rights of Survivorship and Tenants by the


Tenants in Common

In Florida, this is the default tenancy for those taking title together who are not married to each

other and who have not specified another form of co-tenancy. A form of ownership whereby

each tenant holds an undivided interest in property, equal or unequal, derived from the same

or different instruments at same or different times.

Joint Tenants with full rights of Survivorship

A form of ownership where each tenant holds an equal, undivided interest in the title to real

property. Upon the death of one joint tenant, his or her interest is equally divided between the

remaining joint tenants, until full title vests, as a tenancy in severalty, in the last survivor.

Tenants by the Entireties

In Florida, this is the default tenancy for married couples who do not otherwise expressly

specify another type of co-tenancy. A form of legal fiction which recognizes husband and wife

as a single marital unit (one person). Upon death, title automatically passes, outside of probate,

to the surviving spouse.

Florida Study Manual for Title Insurance, 5th Edition by Karen E. Koogler

Q: What is an Escrow?

A: A legal document, money, stock or other property delivered by the grantor into the hands of

an escrow officer and is to be held by the escrow officer until the happening of a contingency or

performance of a condition, and then delivered by the escrow officer to the grantee.

Florida Study Manual for Title Insurance, 5th Edition by Karen E. Koogler

Q: What is an Escrow agreement?

A: An agreement between buyer, seller and escrow officer setting forth rights and

responsibilities of all parties. A real estate contract for purchase and sale is one form of escrow

agreement, as it binds two parties with an escrow officer acting as an intermediary for holding

documents and monies associated with the transaction.

Florida Study Manual for Title Insurance, 5th Edition by Karen E. Koogler

Q: What is a 1031 Exchange?

A: A 1031 Exchange, also known as a Like Kind Exchange, is a transaction under United States

law which specifies under section 1031 of the Internal Revenue Code,

26 U.S.C. § 1031the following:

“No gain or loss shall be recognized on the exchange of property held for productive use in a

trade or business or for investment if such property is exchanged solely for property of like kind

which is to be held either for productive use in a trade or business or for investment.”

This allows taxpayers to defer all of the capital gains taxes resulting from the sale of investment

property, when they use a Qualified Intermediary (should be a corporation that is in the full-

time business of facilitating 1031 exchanges), follow the IRS guidelines, and use the proceeds of

the sale to buy more investment property within 180 days of their sale. In order to obtain full

benefit, the replacement property must be of equal or greater value, with equal or greater

debt, unless the taxpayer adds cash to the deal to replace debt instead, and all of the proceeds

from the relinquished property must be used to acquire the replacement property. The

taxpayer must have assigned his interest in the relinquished property to a Qualified

Intermediary prior to the close of the sale, so that the taxpayer has lost control of the funds

before he has any opportunity to obtain them.

At the close of the relinquished property sale, the proceeds are sent by the closing agent to the

Qualified Intermediary, who holds the funds until such time as the transaction pertaining to the

replacement property is ready to close. Then the proceeds from the sale of the relinquished

property are deposited by the Qualified Intermediary to purchase the replacement property,

which is then delivered to the taxpayer, all without the taxpayer ever having “constructive

receipt” of the funds.

The prevailing idea behind 1031 Exchange is that since the taxpayer is merely exchanging one

property for another property(ies) of “like-kind” there is nothing received by the taxpayer that

can be used to pay taxes with. All the gain is still locked up in real estate and so no gain or loss

can be claimed.

Q: What is a HUD-1 Settlement Statement?

A: This is a summary of the financial portion of the real estate transaction. The title company or

closing agent is required by the Department of Housing & Urban Development to use the HUD-

1 on virtually all one-family to four-family residential real estate transactions involving a lender.

The statement will list the purchase price, loan amount, closing costs for the buyer and seller,

and will show all sums being charged and disbursed to the parties involved. It also clearly

summarizes the total amount due from the purchaser.

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